Collins unveils energy report Alarming price increases forecast

WASHINGTON – U.S. Sen. Susan Collins on Thursday unveiled the results of a bipartisan congressional study of the nation’s energy situation that projects dramatic energy price spikes during the next decade but also offers possible solutions.

“Our report predicts that energy prices could triple within just 10 years,” Collins said. “The average family could pay $2,000 more to meet their energy needs in the year 2010 than they are today.” And that, she added, would come on top of energy bills that are already two to three times higher than normal.

“This is a serious threat not only to Maine, but to the national economy,” Collins said.

The report, put together by Collins and Sen. Charles Schumer, D-N.Y., analyzes current wholesale prices for petroleum, natural gas and electricity and projects their costs through 2010. It also includes projections on the demand for the three major energy sources for the next decade.

The report is titled “The Perfect Storm” because “the three pending crises are coming together to create what could be the perfect storm,” Collins said.

Studies indicate that gasoline wholesale prices could rise by 155 percent in the next decade, from 98 cents per gallon to $2.50, the senators found.

The consequences of such a price hike could be devastating for Maine. “Maine is dependent on tourists,” Collins said. “High prices could discourage them from coming to the state.”

The senators also projected a 271 percent price increase for natural gas, from $5.33 per 1,000 cubic feet to almost $20 in 2010. This could be especially detrimental, the senators said, because natural gas already accounts for 23 percent of the nation’s total energy consumption and its demand is expected to grow by 24 percent over the next decade.

In addition, Collins said, crude oil wholesale prices are expected to rise by 123 percent, from $27.08 per barrel to $60.50; and heating oil wholesale prices could rise by 134 percent, from 77 cents per gallon to $1.80. At the same time, the demand for petroleum is expected to grow by 17 percent.

The senators projected a 22 percent increase in electricity consumption and said that to meet the demand, the United States would need to add at least 700 new power plants.

Collins said the report released Thursday was meant as a wake-up call to her colleagues from both parties and as a reminder that a comprehensive energy policy must be developed. “It’s because we haven’t had an energy policy that we are in this problem,” she said. “And this problem is only going to get worse. That is why it’s important that we act very soon.”

Collins and Schumer also outlined recommendations for the forthcoming energy debate in the Senate. The problem with past proposals was that they were partisan, Collins said, and focused solely on either increasing production or reducing consumption.

This newest blueprint, Schumer said, seeks to find common ground by taking the best from past proposals and combining them to a make it bipartisan.

“We could reduce demand and improve efficiency by increasing federal fuel efficiency standards in cars, trucks, buildings and appliances,” Collins said.

“We could improve distribution by promoting federal, state and local coordination amongst various agencies to create greater energy supply infrastructure while protecting environmental and community concerns,” she said.

Finally, the senators said, development could be increased by expanding incentives for exploration and drilling on federal lands, such as areas in the Rocky Mountains and the Gulf of Mexico.

Collins immediately clarified that “neither one of us is proposing drilling in ANWR,” a reference to President Bush’s controversial proposal for oil exploration in the Arctic National Wildlife Reserve.